3 Banks To Consider Selling When Comparing Their Growth To The S&P 500

Many investors and potential investors have asked me how I determine the growth of a specific company's stock. When it comes to stocks there are few things I consider, but one of the most important things to look at in my opinion, is the short term estimated growth for the upcoming quarter. For this particular screen I looked at three major banks and their negative growth estimates for the second quarter.

Citigroup (NYSE:C): Citigroup, which trades in a 52-week range of $21.40 (52-week low) and $42.96 (52-week high), has traded up roughly 1.7% over the last few trading sessions and could continue to demonstrate similar behavior throughout the second half of the year. One the key catalysts for potential investors would be projected quarterly growth when compared to that of the S&P 500. Currently, C is expected to grow at rate of -15.6% for the quarter and 10.5% for the year. When compared to the S&P 500, which is expected to grow 10.3% for the quarter and 9.7% for the year, those numbers are certainly not that impressive.

For potential investors looking to establish a position in Citigroup, the company is expected to earn $0.92/share on revenue of $19.82 billion for the second quarter. Given the fact the company has surpassed analysts' estimates in three out of the last four quarters, an earnings estimate beat of 5% - 7% would positively contribute to the company's growth. In terms of establishing a position at these levels, I'd remain cautious as second quarter estimates are calling for a significant retraction in growth.

Bank of New York Mellon Corp. (NYSE:BK): Bank of New York Mellon which trades in a 52-week range of $17.10 (52-week low) and $26.43 (52-week high), has traded up roughly 5.5% over the last few trading sessions and could continue to demonstrate similar behavior throughout the second half of the year. One the key catalysts for potential investors would be projected quarterly growth when compared to that of the S&P 500. Currently, BK is expected to grow at rate of -8.5% for the quarter and 8.9% for the year. When compared to the S&P 500, which is expected to grow 10.3% for the quarter and 9.7% for the year, those numbers are certainly not that impressive.

For potential investors looking to establish a position in Bank of New York Mellon, the company is expected to earn $0.54/share on revenue of $3.63 billion for the second quarter. Given the fact the company has surpassed analysts' estimates in two out of the last four quarters (and remained flat during the last quarter), an earnings estimate beat of 5% - 7% would positively contribute to the company's growth. In terms of establishing a position at these levels, I'd remain cautious as second quarter estimates are calling for a significant retraction in growth.

JP Morgan Chase (NYSE:JPM): JPM which trades in a 52-week range of $27.85 (52-week low) and $46.49 (52-week high), has traded down roughly 2.8% over the last few trading sessions and could continue to demonstrate similar behavior throughout the second half of the year. One the key catalysts for potential investors would be projected quarterly growth when compared to that of the S&P 500. Currently, JPM is expected to grow at rate of -37.8% for the quarter and -4% for the year. When compared to the S&P 500, which is expected to grow 10.3% for the quarter and 9.7% for the year, those numbers are certainly not that impressive.

For potential investors looking to establish a position in JP Morgan Chase, the company is expected to earn $0.79/share on revenue of $21.97 billion for the second quarter. Given the fact the company has surpassed analysts' estimates in three out of the last four quarters (and remained flat during the fourth quarter of 2011), an earnings estimate beat of 5% - 7% would positively contribute to the company's growth. In terms of establishing a position at these levels, I'd remain cautious as second quarter estimates are calling for a very significant retraction in growth.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.